eBay 2006 Annual Report Download - page 92

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Intangible Assets
The components of acquired identifiable intangible assets are as follows (in thousands):
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Weighted
Average Useful
Economic Life
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Weighted
Average Useful
Economic Life
December 31, 2005 December 31, 2006
(years) (years)
Intangible assets:
Customer lists and user
base ............ $ 526,657 $(145,397) $381,260 6 $ 545,527 $(240,340) $305,187 6
Trademarks and trade
names .......... 443,565 (75,571) 367,994 5 480,358 (171,390) 308,968 5
Developed
technologies . . . . . . 101,971 (45,882) 56,089 4 103,351 (63,912) 39,439 4
All other . ......... 36,450 (14,761) 21,689 4 58,115 (26,232) 31,883 4
$1,108,643 $(281,611) $827,032 $1,187,351 $(501,874) $685,477
All of our acquired identifiable intangible assets are subject to amortization. Acquired identifiable intangible
assets are comprised of customer lists and user base, trademarks and trade names, developed technologies, and other
acquired intangible assets including patents and contractual agreements. No significant residual value is estimated
for the intangible assets. The increase in intangible assets during the year ended December 31, 2006 resulted
primarily from certain intangible assets acquired as part of our acquisition of the outstanding shares of Tradera.com.
The net carrying amount of intangible assets related to our equity investments, included above, totaled approx-
imately $3.8 million and $2.5 million, as of December 31, 2005 and 2006, respectively. Aggregate amortization
expense for intangible assets totaled $70.2 million, $136.4 million and $220.0 million for the years ended
December 31, 2004, 2005 and 2006, respectively. Included in amortization of intangibles for the year ended
December 31, 2006 is a charge of $10.9 million for in-process research and development related to an asset purchase
completed during the period.
Expected future intangible asset amortization from acquisitions completed as of December 31, 2006 is as
follows (in thousands):
Fiscal Years:
2007 ............................................................. $202,545
2008 ............................................................. 194,018
2009 ............................................................. 172,708
2010 ............................................................. 97,176
2011 ............................................................. 13,604
Thereafter .......................................................... 5,426
$685,477
Note 4 — Segments:
Operating segments are based upon our internal organization structure, the manner in which our operations are
managed, the criteria used by our Chief Operating Decision Maker (CODM) to evaluate segment performance and
the availability of separate financial information. As a result of developments in our business and changes in the
manner in which our CODM evaluates the performance of our Marketplaces segment and determines the allocation
of resources among segments, during the third quarter of 2006, the U.S. and International Marketplaces operating
segments were considered components of one global Marketplaces operating segment. We have recast our
operating segment data for 2004 and 2005 to reflect three segments: Marketplaces, Payments and Communications.
88
eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)